Wrapup 1: S.Korea, China seek to mend relations after THAAD fallout

Lotte Tour Development Co

31/10/2017 03:05

* S.Korea, China to hold summit at sidelines of APEC meeting 
in 
Nov 
    * Worsening N.Korea-China ties may have contributed to 
agreement 
-Blue House 
    * S.Korean China-reliant, tourism-related stocks surge 
    * For a multimedia package on North Korea: https://www.reuters.com/north-korea/ 
 
    By Christine Kim and Ben Blanchard 
    SEOUL/BEIJING, Oct 31 (Reuters) - South Korea and China have 
agreed to work swiftly to get their relations back on track 
following a year-long standoff over the deployment of a 
controversial U.S. anti-missile system in South Korea. 
    The installation of the U.S. Terminal High Altitude Area 
Defense (THAAD) system had angered China and spilled over into 
trade, hurting South Korean business interests in the country. 
    China believed the system's powerful radar could be used to 
look inside its territory. South Korea and the United States 
have repeatedly said THAAD only serves to defend against the 
growing missile threat from North Korea. 
    "Both sides shared the view that the strengthening of 
exchange and cooperation between Korea and China serves their 
common interests and agreed to expeditiously bring exchange and 
cooperation in all areas back on a normal development track," 
South Korea's foreign ministry said in a statement on Tuesday. 
    South Korea's President Moon Jae-in will meet with China's 
President Xi Jinping on the sidelines of an upcoming summit of 
Asia-Pacific Economic Cooperation (APEC) countries in Vietnam on 
Nov. 10-11, South Korea's presidential office said. 
    The two heads of state are likely to discuss North Korea's 
missile and nuclear programme as well as ways to develop 
bilateral ties, a senior South Korean presidential Blue House 
official later told reporters, declining to be identified due to 
the sensitivity of the matter. 
    Pyongyang has undertaken an unprecedented missile testing 
programme in recent months, as well as its biggest nuclear test 
yet in early September, as it seeks to develop a powerful 
nuclear weapon capable of reaching the United States.  
    The moves have angered North Korea's only major ally China 
and drawn further tough sanctions from the United Nations and 
the United States.    
    The recent deterioration in ties between China and North 
Korea may have contributed to Tuesday's agreement, the Blue 
House official said. 
      
    ANNOUNCEMENT WELCOMED, SHARES RALLY 
    In a coordinated statement, China's foreign ministry said 
the two countries would get relations back onto a normal track 
"at an early date". 
    South Korea recognised China's concerns on the THAAD issue 
and made it clear the deployment was not aimed at any third 
country and did not harm China's strategic security interests, 
China's foreign ministry said. 
    China reiterated its opposition to the deployment of THAAD, 
but took note of South Korea's position and hoped South Korea 
can appropriately handle the issue, it added.   
     South Korean companies operating in China have suffered 
since the spat erupted last year, although Beijing has never 
specifically linked its actions to the THAAD deployment. 
    "China repeated this stance during discussions, saying 
difficulties faced by South Korean companies were prompted by 
individual Chinese citizens angered by the THAAD deployment," 
the Blue House official said, adding that improvements for South 
Korean companies would come slowly. 
    Lotte Group, which provided the land where THAAD was 
installed, has suffered most. It faces a costly overhaul and is 
expected to sell its Chinese hypermarket stores for a fraction 
of what it invested.  urn:newsml:reuters.com:*:nL4N1MR6B7 
    A spokesman for Lotte Corp  004990.KS , the holding company 
of Lotte Group, expressed hope its business activity in China 
would improve following the announcement. 
    South Korean tourism and retail shares rallied, with Lotte 
Tour  032350.KS  surging more than 18 percent and Lotte Shopping 
 023530.KS  up as much as 5.7 percent.  urn:newsml:reuters.com:*:nL4N1N616T 
    Shares of Asiana Airlines  020560.KS  gained as much as 4.6 
percent. 
    Hopes have been growing for a thaw in the frosty bilateral 
ties following China's recently completed Congress Party 
conclave, during which President Xi Jinping cemented his status 
as China's most powerful leader after Mao Zedong.  urn:newsml:reuters.com:*:nL4N1N013I 
    Earlier this month, South Korea and China agreed to renew a 
$56 billion currency swap agreement, while Chinese airlines are 
reportedly planning to restore flight routes to South Korea that 
had been cut during the spat.  urn:newsml:reuters.com:*:nL4N1MO1H1 
    As part of efforts to restore the relations, the two 
countries recently held high-level talks, led by Nam Gwan-pyo, 
deputy director of national security of the Blue House, and Kong 
Xuanyou, assistant foreign minister of China and the country's 
special envoy for North Korea-related matters, leading to 
Tuesday's agreement. 
 
 (Reporting by Christine Kim and Hyonhee Shin in SEOUL, Ben 
Blanchard in BEIJING; Additional reporting by Dahee Kim and 
Joyce Lee; Editing by Lincoln Feast) 
 ((christine.kim@thomsonreuters.com; 822 3704 5665; Reuters 
Messaging: christine.kim.thomsonreuters.com@reuters.net)) 
 
Keywords: NORTHKOREA MISSILES/